On The Brink with Castle Island - Weekly Roundup 06/16/23 (Prometheum madness, the Hinman emails, HK's crypto banking play) (EP.431)

Episode Date: June 16, 2023

Matt and Nic are back for another week of news and deals. In this episode:  Coin Metrics derives new estimates of Bitcoin's electricity consumption Nic reviews his Lasik experience  Matt takes Prometheum to task Is Prometheum a patsy for the SEC? Why is vaporware being elevated by the SEC and major exchanges being stymied? We digest the Hinman emails and what they mean for ETH and XRP What do the Hinman emails mean for the SEC's The SEC attempts to make DeFi protocols register as exchanges Blackrock is about to file a renewed application for a Bitcoin ETF Reps Davidson and Emmer's SEC Stabilization Act Hong Kong is pressuring banks to service crypto firms Coindesk gets their hands on the NYAG's Tether reports Abra is in trouble Sponsor notes:  Coin Metrics STATE OF THE NETWORK - The Signal & the Nonce, Re-imagined In this issue of State of the Network, we showcase a novel analysis that sheds light on Bitcoins energy consumption, efficiency and e-waste

Brought down by bad mortgage investments, Lehman, which has 25,000 employees, will be liquidated. The federal government loans American International Group, AIG, $85 billion. This is a different kind of market, and the Fed is asleep. The federal government is stepping it to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis. The Bank of England has pumped 75 billion pounds more to Britain's ailing economy with a new round of Concentuteease. You print a couple trillion dollars, and all of a sudden, people start to worry. So out of this worry, we have something called a Bitcoin. Bitcoin.

Welcome to On the Brink. I'm Matt Walsh. And I'm Nick Carter. In this episode is brought to you by Coin Metrics. And here is the Metrics Minute. Wow, what a Metrics Minute. Today we're going to talk about this in a little bit. But Coin Metrics studied the nonce patterns, aka the randomness produced by a bunch of Bitcoin A6

and they fingerprinted the entire Bitcoin network for the first time determining what kind of hardware was active. on Bitcoin at any given time. This means they can precisely determine the electricity consumption of Bitcoin. This means they were able to estimate the power draw of the Bitcoin network at 13.4 gigawatts or about 16% less than the previous state of the art estimate from Cambridge, which came in about 16 gigawatts for the month of May 23. It also allowed them to better understand the e-waste produced by Bitcoin miners using a three-year depreciation schedule. They have determined that discarded mining hardware sits at 29 kilotons.

Sounds like a lot, but it's actually a lot less than the other estimates of e-waste. So we're going to dig into that in a bit, but actually really landmark report from coin metrics. Really interesting stuff using randomness in the nonce patterns of rented A6. to find out exactly what A6 were mining on Bitcoin at any given time. Pretty cool stuff. That's some genuine big brain stuff there. That was a pretty impressive report. Yeah, shout out to the whole team.

And in particular, Kareem Helmi, who did the work. I mean, he rented all these A6, looked at the type of randomness they outputed, and then was able to do some statistics stuff, which I don't understand, to reverse engineer what kind of A6s were hashing on Bitcoin. I mean, it's the first time that we know for a fact how many S-19, so many S-9s, whatever. The first time we know the hardware composition of Bitcoin, pretty cool. Really cool. All right, well, that was the Metrics Minute.

A lot of people were worried last week about the podcast not coming out on Friday. It came out on Saturday, so apologies. But good rationale, I guess, you did have LASIC. You just couldn't see. Yeah, so that's on me. That one's on me. And also, I didn't really do a good job editing it. frankly I think someone else should edit the podcast if you ask me yeah we probably should get on that

and I was due to do it Thursday evening and I forgot and uh because we record on Thursday because I'd LASIC on Friday and I was distracted and then for all of Friday I just literally couldn't open my eyes for more than about 10 seconds at a time it just sounds like a harrowing accent experience. Was it awful? Yeah. I mean, I don't know if anyone listening is planning on getting LASIC. I still recommend it because now I have 20-20 or better vision. So that part's great, obviously. They told me that it wouldn't hurt the surgery, right? It did hurt, to be clear. It absolutely hurt. The part where they peel off your corneas, you can see that happening. You can see Your cornea is getting peeled off.

The actual laser part was fine. You're just like looking at the green dot, there's red dots. That part's fine. The cornea peeling on and peeling off and back on, you can literally see that. Happenings. Oh, gosh. That sounds terrible. And then they were like, oh, yeah, it'll be four hours and you'll be right as rain.

I was not right as rain, to be clear. No, you were out. You're out of commission. I actually slept for the following, fitfully, slept for the following 24 hours, which is the first time of my life. I've done that. I did get someone to ask me this morning if you actually got your world coins before and then tried after. I said, I don't think you had access to the orb. So I don't actually think you got to run that experiment. I know. I was trying to arbitrage world coin in a very costly way. Turns out your iris, is it your iris, doesn't change. Oh, it doesn't. It's merely the shape of your cornea, I think, that changes.

So I guess the world coin people actually did anticipate this weird edge case. I'm glad they were thinking about it. Glad you're back in action. Yeah, now I never need glasses again. Actually, here's a little interesting, fun story. I got rid of the glasses some years ago, as you recall. But that didn't mean that I could, I had contacts or anything. I just couldn't see.

Yeah, you just, it was a purely vanity thing. You just dropped the glasses and you just couldn't see for years. Yeah, I mean, it was a minus two prescription, so it wasn't that bad, but I just wanted to get rid of the glasses so bad. I just was blind for years. I don't know. That's crazy. Your pickleball game is just going to improve dramatically.

Seriously, that genuinely has. I can actually see the ball now. It's incredible. So yeah, get LASIC, but have no illusions about LASIC because it actually does hurt. Well, hopefully you're listening to this on a Friday, so we're back, back in cadence. And Matt, you had the most banger tweet yesterday. So almost three years to the day from your micro strategy tweet, which was your previous

bangor tweet, you've now done it again. I don't tweet a lot, but I guess this one sort of took on a life of its own. I guess do you want to talk about Promethean now or later? I don't know. I mean, there's so much to say about, we could do a whole episode on Promethean. So I guess the, let's tee it up. I mean, before the deals, I suppose, let's talk about Promethean. So Promethean is this special purpose broker dealer that just got approved by the

Securities and Exchange Commission. So last month, while all these cases against Coinbase and Gemini and really a ton of crypto infrastructure companies were going on, this outfit called Promethean gets approved for the first of its kind special purpose broker dealer. I was not very aware of these guys. They had gone on Laura Shin a couple weeks ago. That was kind of my first encounter. And they said a bunch of things on that that I found very peculiar and certainly came off as outwardly hostile, I would say, to the industry. Sort of gave me R3 vibes in a lot of ways. Kind of like how the R3 guys were telling everyone that Bitcoin was not going to be a thing and private blockchains were going to be a thing. So anyways,

Somehow the Promethean founder ended up at this congressional hearing. And so I just found it very strange, did a little bit of digging. And there's just a lot of things about this company that are odd. I would certainly not say there's anything necessarily outwardly criminal or anything like that, but there's just a lot of weird things. So first of all, you know, they're making claims that this license they have enables them to trade really anything. And it's just not the case. I mean, they wouldn't be able to trade these L1.

one cryptocurrencies, they sort of assume that the poca dots and the theorems of the world to the extent that folks think those are securities would go in and trade on Prometheum. So I think that's misleading. And I think Mike Flood really hit the nail on his head, and I put that in the tweet. Mike Flood's a U.S. representative. And he really drove home that this SBBD, the broker-dealer thing, doesn't really allow them to do anything. As far as we can tell, these guys don't even have any active markets. They don't do any trading. They have no revenue. So it's kind of a weird case study for the SEC to point to. Anyways, did a little bit more digging. And, you know, these guys have the concept of their own blockchain. They have the concept of their own token that

they've pre-sold to a group called Wang Chang, which Tommy Tauberville had done an op-ed in the Wall Street Journal calling out that this outfit had CCP ties. So those guys had bought some of the token, it looks like. And then, you know, these guys at Promethean have raised 48.19 million over several rounds of financing. And of course you need to do a Form D when you raise capital with the SEC, and you need to disclose whether or not you used a placement agent. I would say very, very few early-stage venture-backed companies use placement agents. It's highly atypical.

Usually it would just be the founder that goes out and talks to the VCs. They don't hire a bank. Maybe for a later stage financing, you see that a lot. Anyways, so Promethean started using this placement agent, network one financial services financial securities rather they had paid this outfit over one point five million dollars in sales commissions then you look at these guys and you do a quick broker check and they've had 18 regulatory events one civil event four arbitrations they haven't uh they're affiliated with china so they do a ton of business in china just like promethian you know then you go a little bit

deeper on promethian you see the guys have full-time jobs as attorneys in addition to this Promethean thing. And I don't know what to think. I mean, I guess my net net on this is, it's just particularly strange that the SEC is holding up Promethean as an example of how to do things right when they don't actually have a functional business. And there's just a ton of things about this company that don't really appear like they're fully on the up and up. So I think it's a really strange thing. And my sort of supposition with this tweet is that if you look at the way the guy from Promethean was acting in the hearing, and how he was reading off these canned responses.

I think what we're dealing with here is the SEC just put these guys up and are trying to cultivate this sentiment amongst the Democrats that the McKenry-Thompson market structure bill is not something that they should support. That you can abide by crypto regulations today. Hey, just look at Promethean. And these guys are reading off the Manchurian candidate line.

But it's just totally misleading, right? Like, these guys don't actually have a business. They have no, like, who trades on Promethean? So anyways, I just, just put this all out there. I don't think any of it is necessarily conjecture other than the SEC part at the end where I think this is just political. But all the Promethean stuff is publicly sourced and actually all the data that I cultivated there, yeah, I'd say 90% of it is on SEC databases as it were already. So this is all public information anyone could get. So that's,

that was the tweet. And yeah, I got a bunch of new followers. It's been kind of crazy. I mean, I didn't even know where to start. Another tidbit is these, guys are being held up as securities laws experts and two of the co-ceoos at promethium went to a law school that lost its accreditation later on forgot about that part yeah sorry you said that that was too mean to include in the tweet storm but I thought it was very funny yeah it was sort of perhaps mean but this is war okay this is war so I mean to be clear I think these permitting guys I don't know they're sort of like useful idiots in a lot of ways I don't think that they're malicious guys.

I think that they've done a lot of things that are really weird and that as a venture investor, I would never go anywhere near this thing. But I'm not saying that they're like breaking any laws. I don't think they are. I just think this is the issue here is the SEC is putting these guys up as a pedestal of on a pedestal of what you should look like as a crypto company, but they don't even have a business.

Yeah, it's vaporware. So, you know, most benign interpretation is, these guys are Patsies, you know, whereby they are being used by the SEC and maybe the House Dems and the Financial Services Committee to advance the idea that there is a pathway to compliance as a exchange in the U.S. as a crypto exchange under existing laws. It's our job to expose that and point out that that's not true because this supposed pathway is exemplified by a company that is

vaporware that has no business model that's not trading. Meanwhile, of course, the contrast here being and not to mention weird CCP links also is very odd. Meanwhile, the major crypto exchanges in the US universally are being harangued by the SEC. The SEC is making as difficult as possible

for them to do business, is suing them, harassing them, and not granting them the requisite licenses. Not to mention, Coinbase does have an ATS license. It's just sitting there collecting dust because there's nothing you can do with it under the current status quo with security's laws and the SEC's posture. So it's not just a matter of come in, register, get this license, you can do business. They would love to do that. That's just, not a possible pathway. So that's why this is so curious. It's that juxtaposition, I would say. I mean, you just hope that it draws more attention to the fact that we need Congress to act here. We desperately need Congress to act. And I'm not saying it even needs to be this McKenry Thompson

bill, although this is a very common sense bill that allows for projects to raise capital under the SEC's oversight, and then it allows for a network to be sufficiently decentralized where you get a commodity token at the end of the day after a couple of years. And so if you had something like that, we would not be having this argument right now. And then you'd have clarity on what's a security, what's not, here's how securities trade, here's how commodities trade. But instead, we just have the SEC. And the wheels are off at the SEC right now.

I mean, it's very clear they don't have a handle on how these markets work. If you're putting up a company like Prometheum as an example of how to do business, you just don't get these markets. So it's, you know, it's hard to see. I think we really need Congress to act here and to design laws. And then the SEC can go out and enforce those laws. Yeah. And also the name bothers me because, you know,

Prometheus was a hero that stole fire from the gods and was punished for it for all eternity, right? So that's not analogous to what the Prometheum guys are doing because they're in cahoots with the establishment here. they're not doing anything transgressive. They're not trying to change the system to promote any new innovation or anything differently or seize any power that the regular folks didn't have before. There's an extension of the government apparatus.

So from a mythological perspective, from an etymology perspective, I also object. I should have put that in there. Yeah. Yeah, that's the worst part even. Okay, there's a number of other SEC things. But first, the deals. Deals of the week.

All right, first one up is Hyperplay. This is a Web3 gaming company. They raised $12 million from Griffin Gaming, Bitcraft, Marana, Ethereum, and others. Then you have Jensen, a blockchain-based AI compute protocol. No idea what that means. They raised $43 million from A16C, coin fund, and Protocol Labs. This is a company that's based in London. So A16Z announced this in conjunction with moving to London

and moving part of their operation to London and then having some of their crypto division in London, which Richie Sunak got on board. Good move, I think. Yeah, I hope, I hope the Britain's new PM is sincere about his desire to embrace tech. I think he changed, did he change 10 Downing Street to something like 101, 101 Downing Street?

Yeah, he made it binary. Yeah, I thought that was funny. I don't know if they actually mean it. do hope it's true. If true, then it's another example of a different jurisdiction. Take an example of the laxity in the U.S. Yeah, good marketing by Andreessen, though. I mean, this makes sense. I mean, we're actually seeing a bunch of companies move to London. So we'll see what happens to London here. You might have to go open up the London office. Oh, don't send me back, please. Speaking of which, next up, BoomFi, London-based crypto payments company, there is $3.8 million

from Passion Capital, Cracken, MoonPay, and Blockchain Founders Fund. Then we have collectibles. This is a Web3 Collectors platform. They raised $5 million from blockchain ventures, blockwall, and Peter Thiel. Then we have Connected the blockchain interop protocol. There is 7.5 mil from Polychain, Polygon, and others. And last up, we have Bit2Me. This is a Spanish crypto exchange.

They raised $15 million from InvestCorp, Telefonica, and others. Those are the deals. Those are the deals. Back to the SEC. Mr. Bill Hinman, man, how much does the SEC regret that speech that he gave in 2018? How much do they regret it now? Yeah, so he was the director of, I guess, what is it? Corporate finance.

Okay. So he was the director of corporate finance at the SEC. He does this speech in 2018 that sounded like a policy speech, really. Sounded like guidance. I remember it very distinctly. and he was referencing a decentralized network. So he was basically talking about Ethereum and the idea of being sufficiently decentralized.

A lot of people interpreted that speech as saying a cryptocurrency network, once it appears to be sufficiently decentralized, is not a security anymore. And I would say a lot of people acted on that, including a lot of projects, Alt-L-1s that got launched, a lot of venture investors.

Market participants took this very clearly at the time as guidance from the SEC on things not being securities after a certain point. Even to the extent that we started to see pitches from companies that were data businesses that were solely focused on quantifying the quote unquote Hinman test. Yeah, that was 100% a the market's interpretation of his speech was that there was a explicit, possibly even bright line test determining whether a crypto asset was no longer secure. Totally the case. In fact, in fact, in 2018 at the DC fintech summit, Hinman spoke. And I asked him, what do you make of the fact that given your speech, people are now interpreting this as a

literal test? And he dithered on that. But now we know. Now a trove of documents has been released. Yeah. So the agency has always said that this was just Bill Hinman doing a personal views speech, which all these emails basically just proved that that wasn't true. So there's remarkable detail here around agency officials from all different departments chiming in on this. So you had, you know, Brett Redfern was in there, Val Sepanic. You had all sorts of folks that were just talking about it and genuinely engaging with the issue. And some even said, hey, this will be perceived as a policy speech. And it went forward. Nonetheless, so these, these emails get turned over as a result of the Ripple lawsuit. I don't really know that they actually have that much

of an impact on Ripple's case. I'm not deep enough in Ripple's case. But certainly this just makes it seem like the SEC just doesn't have its act together and perhaps never did. And certainly if you're an Ethereum holder, an ether holder, you're looking at this and saying, well, it's just, I mean, it's obvious that ETH is a commodity at this point. Yeah, that was my interpretation. So it's very kind of curious and weird that a lot of the ripple defense was premised on trying to throw Ethereum under the bus. That was actually my interpretation. And then the one major consequence of this email release that was precipitated by the ripple case was in effect a kind of ex post facto baptism of Ethereum as presumably not a security because you had language.

in these emails, I think maybe even from the general counsel at the SEC saying, if you make this speech, it will make it very hard for us to go after Ethereum for being a security. Lo and behold, Hinman does include the mention of Ethereum in the speech, which seems now probably exculpatory for Ethereum specifically. I think so. I think it's, there's zero chance. And I'm just going to say there's zero chance that Ethereum could ever be a security after these emails are released. I mean, it's just incredibly clear.

So I agree. It makes the SEC look shambolic. It also muddies the waters because it makes it clear that this wasn't just one guy at the SEC going off the reservation and being a maverick and declaring his personal views. He was, in effect, speaking for the SEC. So the SEC's, you know, their stance has been, like, him and he just went rogue. Don't put any credence into what he said. They're not going to be able to maintain that posture anymore post the release. of these emails.

So the other thing that was happening this week, so that's Hinman, and I think that just that in and of itself would have been a big story. Then we had Promethean, that's obviously a huge story. Then, you know, not a lot of people are necessarily talking about these exchange rules. So the SEC has this rule proposal out to redefine the definition of exchange. And as part of that, they would include decentralized finance protocols. But they would also include things that are closer to chat features on like Bloomberg. So there's a bunch of non-crypto stuff as well.

The backlash to this rule proposal is breathtaking. And so the deadline is this week to get your comments in. Might have even been yesterday. I was just perusing this thing. Bain Capital, Fidelity, True Ventures, Bloomberg, Coinbase, Circle, Market Access, SIFMA, Consensus, Virtue, Flowdes, Galaxy, Coin Center, Paradigm, hundreds of others, big-name firms are all just pointing out, this thing makes no sense. Like, who wrote this rule proposal?

I don't think I've ever seen a rule that had that much. backlash. I mean, not that I can remember. I'm sure there have been other unpopular rules, but this just seems like they don't know what they're talking about over there. And if you, to be clear, if the SEC were to determine that a defy protocol ought to be treated as an exchange under reg NMS, then it's impossible for a defy protocol to comply with this. So this is a way of de facto legislating, we're creating a rule that regulates defy out. of existence structurally. It's the SEC, among other things,

trying to just dictate U.S. policy towards Defi as an end around to Congress. And then there's a bunch of non-crypto stuff in there that's just completely unworkable, that rightfully so, a bunch of the legacy TradFive players just point out is, okay, this is unworkable. Like, who came up with this?

So they're getting a ton of backlash on that. It's just, it's remarkable. Okay. Last SEC related news item of the week, BlackRock. is apparently close to filing a new application for a Bitcoin ETF. Yeah. I don't really know how to interpret this,

but maybe they believe that information or the reality on the ground has changed favorably for the sake of an FETF. Yeah, so BlackRock is, so this came out this morning that they are reportedly close to filing an application for Bitcoin ETF. I guess you just see this as a clear signal that they think the facts and circumstances on the ground warrant a Bitcoin ETF. And I'm really eager to read their proposal. BlackRock doesn't do anything half measured, I would say, in my experience. So they're following in the footsteps of Bitwaz and Fidelity and a number of others that are filed. And, you know, good for the industry, right?

Yeah, actually, there is another SEC thing, which is that Representative Warren Davidson of Ohio and majority whip Tom Emmer have introduced a bill called the SEC Stabilization Act. Oh, I forgot about this. they could have actually just entitled this the fire Gary Gensler Act because that's what it would do. It would create a six commissioner structure with the executive director kind of a pared down role, which would oversee the day-to-day operations. And it also calls for the dismissal of a SEC chair, Gensler, which is, I don't think it's going to pass, but still it shows how completely disenchanted a big portion of Washington is with our beloved SEC chair. Yeah, so this would create three Democrats, three Republicans, and then this executive directoral.

I actually think it kind of makes sense. I don't, I mean, so yeah, totally interesting bill there. Again, I think it's a, you know, it's a partisan bill at this point, so I don't think that would go anywhere. All right, a bunch of other news. Robin Hood, they have ended support for all the tokens that are named as securities in the SEC lawsuits against finance and Coinbase. So you're seeing a difficult liquidity landscape, I would say, to say the least, if you're you're a trading firm right now. Yeah, and this, I think, was the SEC's objective,

was they didn't necessarily even need to win in court by declaring somewhat arbitrarily that certain assets were securities. What they just may have wanted to do, and I think we said this last week, was declare these things securities, create a chilling effect, whereby all of the onshore exchanges delist them,

proactively, and then they've kind of achieved their objective by chilling these markets, and it appears to be working. Now, on the total opposite end of that spectrum, did you see this Financial Times report that Hong Kong is pressuring two banks, HSBC and Standard Chartered, to start banking more crypto customers? That sounds very different from what we're seeing. Yeah, and honestly, this kind of made my blood boil a little bit, because it's literally the diametric complete opposite of U.S. policy where they're pressuring banks to not do business

with crypto. Here they're saying, do it. Let's foster a crypto ecosystem in Hong Kong under the established rules that they've laid out, which there are rules. And banks, you've no excuse. You know, there's nothing particularly scary about crypto. And yeah, I mean, it's so disappointing because it shows that the U.S. has totally surrendered its lead here, and other jurisdictions are perking up their ears and realizing they have a huge opportunity here as the U.S. has squandered its lead. And we see this in so many other indicators, like at a chart I posted last week of Tether Market Cap versus U.S.DC,

of course, we see the onshore market shrinking, we see balance sheet in the U.S. shrinking and growing elsewhere. and this is what the regulators don't understand in this country. They don't make a universal law for the whole world. They govern one jurisdiction. Capital is mobile. Entrepreneurs are mobile. Venture firms are mobile.

And they will react to this and just simply do business elsewhere. And that's what's happening. So now China sees that as an opportunity. So you brought up tether. I've got my fud dice out right here. It's the blue version. And tether's on it. So we've got more tether fud coming.

Yeah, so today's, man, the Tether story. So Tether at a blog post today where they said in, you know, they settled with the NYAG in 2021. And then Coin Desk foiled NYAG to get access to Tether's quarterly reports. And I guess Tether had been successful in blocking the dissemination of those reports. for the duration, but now they've given up their opposition. And I think the two-year term of supervision with NYAG has also expired. And so then they put out a blog post saying,

all right, Coinbase has their hands on our attestations and our reserve reports that we provided to NYAG. That's what's driving today's latest panic regarding Tether. So Tether's sold off a little bit, trading slightly below PEC, not meaningfully so. And I suppose at any moment now, CoinDesk is going to release an article made by the time this comes out, they probably will, detailing Tethers reserves, reserve quality, at least as of 2021, I suppose. I don't know how contemporaneous it will be.

And, you know, just remember the last time CoinDesk came out with an article about a major crypto company's balance sheet. Yep. Of course, you're referring to Alameda. So CoinDesk reporters do great work. You know, someone before this call asked me what I thought about Tether. And I said, same answer. I have no idea. Yeah, so this is the latest twist in the Tether saga. I suppose Tether is worried that if CoinDesk releases this information,

then it'll put pressure on their counterparties and they'll be unbanked. And then Tether will have a fresh new crisis. But so this new one is going to play out in the coming days. A couple dribs and drabs here. Speaking of CoinDesk, I enjoyed David Morris's, Gary Gensler's Catch-22 vision of regulated cryptobroker. So sort of in the vein of the Promethean one. So check that out.

Blockchain Association came out today has filed a freedom of information request on the topic of Promethean. And then you also have this Binance USA temporary restraining order, which the judge has said, come back to me. So the judge declined to halt the assets on Binance U.S. was not persuaded, but said, come back to me with a joint agreement here. Go figure it out amongst yourselves. I don't see this as particularly urgent. So we'll see what happens there. So not curtains yet for Binance US, but certainly they're in a very beleaguered state right now. Yeah, I think they're in the 15th round and it's not looking like it's going to be an Apollo Creed, Rocky Balboa situation. They might be

Apollo Creed. Sometimes you can win in the 15th round, even if you're behind on point. Yeah, you literally have to be Rocky Balboa. It doesn't happen a lot. I mean, these things don't even go 15 rounds anymore. Have you ever just cut your- 12 rounds now? Do you remember when, I don't have cable anymore, but do you remember when Rocky used to just be on,

like all day growing up as a kid? Or just be like, okay, you got Rocky, Rocky, Rocky 2, Rocky 3, Rocky 4, Rocky 5. I mean, Rocky 5 never, never happened. I wasn't allowed to watch TV as a guy. kid. Similarly, but if your parents are at running errands or something, I was closer to you, but yeah, sometimes you just have to try to sneak, sneak Rocky or the godfather.

This is why I can't invest in gaming startups because I wasn't allowed to play video games as a kid. Yeah, so I don't know if we've ever talked about this on the podcast. I was not allowed to play video games as a kid either. And so what you end up having here is that two of the four partners at Castle Island have absolutely no idea about video games because we weren't ever going to play them. And then I have a little brother and he was allowed to get a Sega and I wasn't. So it's just, it's crazy.

It might be four out of four partners at Siv that never gamed. Yeah, I don't know. I've never once talked about video games with Sean or Ria come to think of it. Yeah, I did play some civilization, which is a turn-based strategy game when I was older, which is a great game. And one of the reasons I was okay with Siv is the name. per sieve was because it was reminiscent of that game. Yeah, I remember I was talking to Alex Pack about this back in 2018,

and he was like, oh, you named it after the game. I was like, no, not at all. It's a fort down the street. So Bitco's $100 million lawsuit against Galaxy over the breakup of the $1.2 billion acquisition that did not close has been dismissed by Delaware court. Yeah, I guess this kind of was small. news this week, but I guess that is dismissed. It seems like now the two firms are just kind of off on their own. And Bickgo bought, do we talk about this last week? They bought Kingdom Trust?

Yeah. Prime Trust. Prime Trust. All these trusts, I get confused. The Prime Trust, yeah, I guess we mentioned it last week. Prime Trust. And then, of course, Scott Purcell, the founder of Prime Trust, is now running Fortress Trust and Fortress Trust. And there's a question as to whether it's actually being alleged now by Bank, BANQ, that he actually unlawfully transferred the Prime Trust employees and software and IP to Fortress Trust. There's a lot to pay attention to in the crypto space. That's not something of, I admit I've not been paying attention to that.

So we have a new podcast. We have an interview coming out on Monday with a member of the Wyoming Senate talking about all of their initiatives. Do you know the Wyoming has passed over 30 pieces of legislation pertaining to digital assets? Wow. That's amazing. I can't wait to hear about this. Well, breaking news, crypto lender, ABRA has been hit with an emergency cease and desist order. by the Texas State Securities Board,

and it alleges that ABRA, otherwise known as Plutus Financial, has been insolvent for months. And so that is interesting. Earlier today, Abra announced that they were leaving the U.S. This is one of these ones that I'm sure will play out a lot more over the next few hours, but as we're recording it,

it literally just broke. Yeah, I mean, and there was another lender, Korean one, I think, that it was also emerged this week that they had just been hiding their losses from FTX for almost the last year. It seems like the fallout now includes Aver as well, fallout from Genesis, Three Arrow, and others. This is still playing out. The credit crunch of last year, you know, the big events with FTX, with Three Arrow's with Genesis. These things are still being worked out by the market and we're, you know, still learning of the firms that

are affected by these things, which apparently includes Avernau. Crazy. I think that's it for the week. It felt like a really busy week. Yeah, that one was intense, huh? That was a crazy week. Yeah. I guess we got a long weekend here. Yeah, happy Juneteenth. Happy June teen. All right, well, I think that's it. We'll be back on Monday for a really good episode. I'm looking forward to listening to that one with Wyoming as a key feature. We will see you on Monday. Have a safe and healthy weekend.